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What if isolationism is the new norm?

18 March 2020

Close the doors, batten the hatches, prepare to repell boarders!

That seems to be the war-cry in the battle against the corona-virus pandemic.

It appears as if every country in the world is going into a state of lock-down and isolation.

The flow of people on international flights has dwindled to a mere trickle and even the levels of freight have been slashed due to a lack of staffing and the dearth of passenger travel on which it often relies for its transport.

Apparently all this is going to cost us billions in terms of propping up the economy so that people don't starve while holed up in their homes over the coming weeks or months. Already we're talking about self-sufficiency on a previously unprecedented scale.

So what if we discover that the benefits to being isolated and self-sufficient outweigh the disadvantages?

After all, if we're not importing stuff then we're not spending any of our overseas reserves, are we?

If we become self-sufficient and our economy detaches from the global one, could we survive in the longer term?

In fact, what is the medium to long-term out look for our economy?

Apparently we'll have to borrow-up large in order to fund our multi-billion dollar emergency support package -- but from who?

Surely every country is in the same situation, with governments having to dip deep into their pockets to keep poverty and homelessness at bay during a time when many folk will be unable to work, even if they're fit, able and willing to do so.

So who has all the money that these countries will be borrowing to cover the costs associated with subsidising wages plus paying utility companies for continued supply of power, phone and water? Is there some super-rich benefactor out there who has gazillions of dollars sitting in an account that they're now lending out to all the nations of the world?

It's rather confusing (to me at least) isn't it?

Here in NZ we're pretty lucky. We probably have enough food production to see us through the worst of things and since our electricity is over 80% generated by renewables, the government (through its huge holdings in the electricity generation industry) can afford to forego some of its bountiful dividends to help keep prices down.

What about petrol for the car though? Perhaps you should have bought that EV after all?

And you'd better hope that your computer, yes, the one you rely on in order to work from home, doesn't crash and burn. We're probably one of the least self-sufficient countries in the world from a hi-tech perspective. Gone are the days when we used to manufacture our own (rather hokey) radios, TVs and other electronic items.

The other problem with imports, if you can get them shipped, is going to be the price.

The Kiwi dollar is sinking faster than The Edmund Fitzgerald so everything we import is going to get more expensive, a lot more expensive.

Yet imagine the serine tranquility of a return to simpler times. Back to the days when every home had its own cow and a vege patch out the back, plus a few chickens and a rooster that would crow at sunrise every morning.

Instead of spending countless wasted hours perched in front of a glowing screen, watching mind-numbing reality TV shows or being seduced by clickbait news media, we could chat with neighbours over the back fence, play a game of cards in the warm summer evenings or just have a few beers as we watch the world go by.

Sure, we wouldn't be rich, but we'd be happy and contented... right?

Cue Tui's ad!

Sadly, it's far more likely that the next few years will be tough ones.

Governments won't be able to keep bailing businesses out and if this becomes a protracted lock-down, many will go to the wall, leaving ex-employees without income and an insufficiently large tax-base to fund sufficient welfare support. Even when the ecomomies of the world do start to recover, inflation will become rampant -- it's the only way the levels of debt incurred will be able to be erased.

Ah well, at least these will be "interesting times" and what doesn't kill you only makes you stronger.

Perhaps it would be a good idea for NZ to spend more time in future, reducing its dependency on the rest of the world and having a good "fallback" plan for times when self-sufficiency may be forced upon us.

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